Excerpt:.....all of them would be liable for the offence. as to who was in charge of and responsible to the company's business at the relevant time depends only on the internal working arrangement made amongst those constituting the company. it is a question of fact to be established. only because one of the partners or official was present when the alleged contravention was found out cannot ipso facto give rise to any presumption that only he was in charge of and was responsible to the company's business. sometimes a watchman or other minor functionary of the company may be in the business premises.; -- section 7 read with section 11 -- court to apply its mind to report under section 11 and after taking cognizance determine persons to be called upon to face trial.;in examining as to who all may..........: 1971crilj418 has been explained may be seen.5. as to who was in charge of and responsible to the company's business at the relevant time depends only on the internal working arrangement made amongst those constituting the company. it is a question of fact to be established. only because one of the partners or official was present when the alleged contravention was found out cannot ipso-facto give rise to any presumption that only he was in charge of and was responsible to the company's business. sometimes, a watchman or other minor functionary of the company may be in the business premises. in ram dutt gupta's case the charge sheet placed in courtcontained information that at the time when the alleged violation was detected only one of the accused named in the charge sheet was present.....

Judgment:ORDER

Venkatesh, J.

1. Heard. These petitioners are admittedly partners in a firm carrying on business in edible oil seeds, pulses, edible oil etc, in Bijapur city. In the proceeding initiated before him against these persons the Learned Chief Judicial Magistrate, Bijapur, (C.C. 2637/81) had framed two charges against the accused. One was for alleged violation clause (3) r/w. 5 of the Karnataka Edible Oil Seeds (Licensing) Order, 1967 and another, for contravention of Clause(4) of the Pulses, Edible Oil Seeds and Edible Oil (Storage) Order, 1977, both punishable u/s. 7 of the Essential Commodities Act (the Act). The accused challenged the Order framing charges against them before the Sessions Judge, Bijapur. The Learned Sessions Judge allowed the revision in part and quashed the first charge and directed the trial to go on re; the second charge.

2. In this Petition filed under Section 482 Cr. P.C., it is that part of the order of the Sessions Judge, retaining the second charge that is challenged. In support of this claim the Learned Counsel for the petitioners mainly made two submissions. His first submission is that the Learned Sessions Judge had erred in not noticing the second proviso to clause (4) of the Order of 1977, which clause, he says, allows a commission agent to store even beyond the quantity now said to have been found with his clients by the authorities. A similar argument had been pressed before the Learned Sessions Judge, but in vain. The Learned Judge has stated clearly as to how the quantum found withthe petitioners was in excess of the limit placed even by the second proviso. This is only a prima facie finding and it would still be open to the accused to show during the trial that they come within that proviso.

3. The second ground urged by the Learned Counsel for the petitioners is that even according to the charge-sheet only one of the partners was present at the time when the premises was raided, and, therefore, if at all, only he can be proceeded against, but not others. In this connection, besides placing reliance on Section 10(1) of the Act, he also drew my attention to a decision of the Calcutta High Court reported in Ram Dutt Gupta & Ors. -v.- The State of West Bengal 1985(1) CRIMES 733.

(1) Offences by Companies : -- If the person contravening an order made under Section 3 is a company, every person who, at the time the contravention was commited, was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly :

Provided that nothing contained in this sub-section shall render any such person liable to any punishment it be proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary, or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.'

In the case of a Company that provision makes liable 'every person who, at the time the contravention was committed, was in charge of, and was responsible to the company and as well as the Company. Not merely that, sub section (2) further makes the other officials of the Company named therein also liable under certain circumstances. It is thus clear that the person in charge of and responsible to the company for the conduct of its business is liable. If more than one or all the partners of a firm, under the arrangement entered into between them, are in charge of and responsible to the company for its business all of them would be liable for the offence. Re. the liability of the company and its directors, partners, etc the decision of the Supreme Court in Sheoratan Agarwal & Another -v.-State of M.P. : [1985]1SCR719 where in the previous ruling of that Court in : 1971CriLJ418 has been explained may be seen.

5. As to who was in charge of and responsible to the company's business at the relevant time depends only on the internal working arrangement made amongst those constituting the company. It is a question of fact to be established. Only because one of the Partners or official was present when the alleged contravention was found out cannot ipso-facto give rise to any presumption that only he was in charge of and was responsible to the company's business. Sometimes, a watchman or other minor functionary of the company may be in the business premises. In Ram Dutt Gupta's case the charge sheet placed in Courtcontained information that at the time when the alleged violation was detected only one of the accused named in the charge sheet was present in the business premises and that too after business hours. Taking into consideration this fact and further stating that there were no materials in the charge sheet to suggest even prima facie that theother accused were in charge of and responsible to the company's business the Calcutta High Court, being of opinion that the Court below ought not to have issued process to the other accused, quashed that order.

6. The decision in that case has turned upon the facts of that case. The decision cannot be taken as one explaining completely the ambit and scope of Section 10 of the Act.

7. In examining as to who all may be called upon to face an enquiry or trial in the case of an offence arising under Section 7 of the Act, and of which Court has taken cognizance under Section 11 thereof, the Court will have to apply its mind to all the facts placed before it in the form of a report submitted by the concerned under that provision (Section 11 of the Act). In this connection the following observations of the Supreme Court in Satya Narain Musadi & Others vs. State of Bihar may be noted :

'Section 11 of the Essential Commodities Act precludes a Court from taking cognizance of the offence punishable under the Act except upon a report in writing of the facts constituting such offence made by a person who is a public servant as defined in Section 21, Penal Code. If a Police Officer investigating into an offence which the Act has declared ascognizable submits a report in writing under Section 173(2) Criminal P.C. disclosing an offence under the Act and requesting for proceeding further into the matter it would satisfy the requirements of Section 11 for taking3. : 1980CriLJ227 cognizance of the offence so disclosed. Undoubtedly the police officer submitting the report would be a public servant within the meaning of Section 21, Penal Code. Such a report would be a police report for the purposes of Section 190(1)(b), Criminal P.C. and if the Magistrate takes cognizance of an offence under the Act upon such a police report Section 11 would be complied with in its entirety. The report as envisaged by Section 173(2) has to be accompanied as required by Section 173(5) by all the documents and statements of the witnesses therein mentioned. One cannot divorce the details which the report must contain as required by Section 173(2) from its accompaniments which are required to be submitted under Section 173(5). The whole of it is submitted as a report to the Court. It follows that the Court can look at the report inprescribed form along with its accompaniments for taking cognizance of the offence.'

8. On such a perusal of the report which includes the charge sheet, if any, and all the papers accompanying it the Court takes cognizance of an offence. Only thereafter the question as to who all should be called upon to appear before Court in connection with that offence arises. In this connection how the Court should proceed can be gathered from the following observations of the Supreme Court in Raghubans Dubey -v.- State of Bihar : 1967CriLJ1081 .

'..............In our opinion, once cognizance has been taken by the Magistrate, he takes cognizance of an offence and not the offenders; once he takes cognizance of an offence it is his duty to find out who the offenders really are and once he comes to the conclusion that apart from the persons sent up by the Police some other persons are involved, it is his duty to proceed against those persons. The summoning of the additional accused is part of the proceeding initiated by his taking cognizance of an offence. As pointed out by this Court in : 1965CriLJ250 the term 'complaint' would include allegations made against persons unknown. If a Magistrate takes cognizance under Section 190(1)(a) on the basis of a complaint of facts he would take cognizance and a proceeding would be instituted even though persons who had committed the offence were not known at that time. The same position prevails, in our view, under Section 190(1)(b).

(10) Mr. Sachthey, the Learned Counsel for the Respondent brought to our notice some decisions which have taken the same view. The Calcutta High Court inSaifar -v.- State of West Bengal, : AIR1962Cal133 following the Full Bench decision of the Judicial Commissioners, Sind 71, held that when a Magistrate takes cognizance under Section 190(l)(b) on a police report he takes cognizance of the offence and not merely of the particular persons named in the charge sheet, and, therefore, the Magistrate is entitled to summon additional accused against whom he considers that there was good evidence, after perusal of the statements recorded by the police under Section 161 and the other documents referred to in Section 173 even without examination of witnesses in Court.'

And taking cognizance is also not a mechanical affair. Before taking cognizance on a report submitted the Court may seek clarification on points not clear.

9. In the instant case the police in their charge sheet have shown the Company (Firm) and all its partners as the accused. Perhaps in their view all the partners are in charge of and are responsible to the business of the company. As to who exactly at the relevant time was in charge of and was responsible to the business of the Company is a fact only known to the partners who are the accused. It is open to them to place the relevant material in the Court below at the appropriate stage and obtain necessary relief.